Retirement Security in an Aging Society

James Poterba

No 19930, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The share of the U.S. population over the age of 65 was 8.1 percent in 1950, 12.4 percent in 2000, and is projected to reach 20.9 percent by 2050. The percent over 85 is projected to more than double from current levels, reaching 4.2 percent by mid-century. The aging of the U.S. population makes issues of retirement security increasingly important. Elderly individuals exhibit wide disparities in their sources of income. For those in the bottom half of the income distribution, Social Security is the most important source of support; program changes would directly affect their well-being. Income from private pensions, assets, and earnings are relatively more important for higher-income elderly individuals, who have more diverse income sources. The trend from private sector defined benefit to defined contribution pension plans has shifted a greater share of the responsibility for retirement security to individuals, and made that security more dependent on choices they make. A significant subset of the population is unlikely to be able to sustain their standard of living in retirement without higher pre-retirement saving.

JEL-codes: E21 G11 H55 J14 (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-age, nep-dem and nep-mac
Note: AG PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Published as Poterba, James M. 2014. "Retirement Security in an Aging Population." American Economic Review, 104 (5): 1-30.

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